Human Capital Composition, Growth and Development in an R&D Endogenous Growth Model

Tiago Sequeira

Macroeconomics from University Library of Munich, Germany

Abstract: The effect of human capital on growth and development has been somewhat neglected in economic literature. However, evidence has suggested the importance of engineering and technical skills to economic growth. Simultaneously, European Commission and OECD has presented data that reveal the shortage of these fields of science in developed countries. Using a standard increasing-variety endogenous growth model, we propose various measures of this composition, namely the ratio of high-tech to total human capital and the ratio of high to low-tech human capital. We show that allocation matters in what growth and development are concerned. We also show that the decentralized equilibrium leads to less investment in high-techs than does the social planner and the tendency to under-invest in R&D is expanded under the presence of human capital composition. When compared to data, the model does well in explaining the rate of growth and the level of development (less robustly) as a function of these measures.

Keywords: Human Capital Composition; Growth; Development; R&D (search for similar items in EconPapers)
JEL-codes: O15 O33 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2003-10-18
New Economics Papers: this item is included in nep-dev, nep-dge and nep-lab
Note: Type of Document - pdf; prepared on win98; pages: 48
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Related works:
Working Paper: Human capital composition, growth and development in an R&D endogenous growth model (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpma:0310015

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